Aohui official website: The US dollar index fluctuates at a low level, and may rebound after stopping the decline

In early Asian trading on Tuesday, the dollar was broadly stable but still close to the key lows it hit last week.AUSFOREX official websiteThe dollar edged up 0.27 percent against the yen at 143.53, the data showed, but remained close to last week's six-month low of 142.05. The dollar fell 0.22 percent against the euro to 1.1324, just one step away from last week's three-year high of 1.1474.

Against the backdrop of the influx of safe-haven funds, the dollar's decline against the Swiss franc was even more pronounced. Data show that the dollar has fallen nearly 8% this month and is on track to record its biggest one-month decline since December 2008. The dollar is currently up 0.3% against the Swiss franc in Asian markets, but the overall trend is still weak.

"The recent pullback of the dollar reflects not only market confusion about the direction of policy, but also a reassessment of the attractiveness of US assets by global investors." - Kieran Williams, head of Asian FX at InTouch Capital Markets

Policy has repeatedly interfered with market judgment, weakening the dollar's safe-haven properties

The focus continued to be on the evolving tariff policy between the US and Asian powers. Sentiment was slightly buoyed at the weekend when the US announced it was temporarily removing some electronics from the list of tariffs. However, subsequent policy comments from the US suggested that the measure may only be a temporary concession.

"Recent policies have repeatedly eroded the safe-haven appeal of the dollar, driving investors towards other safe-haven assets." - Kieran Williams

Analysts have pointed out that market uncertainty about the future direction of U.S. policy has caused a structural adjustment in investment portfolios.

Treasury yields have fluctuated wildly, and investors have questioned its safe-haven status

While the 10-year Treasury yield held steady at 4.354 per cent at the start of the week, sentiment remained cautious against the backdrop of last week's volatility. Data showed that the 10-year yield rose nearly 50 basis points last week, the largest weekly gain in two decades, and then fell back 13 basis points, showing the speed and severity of the withdrawal of funds.

"Last week the market was in deleveraging, selling and reallocation. This week the mood has been relatively calm as the holidays approach." - Prashant Newnaha, Asia Pacific rates strategist at TD Securities

Fed releases dovish signal, or 86 basis points interest rate cut this year

Fed officials sent a more dovish signal amid rising concerns about the outlook for the US economy, with Governor Christopher Waller saying current trade policy could be a major shock to the US economy and could consider cutting interest rates if the economy was at risk of recession, even if inflation remained high.

According to LSEG data, the market has started pricing in 86 basis points of interest rate cuts for the rest of the year, reflecting investors' high expectations for a policy shift.

The current trend of the US dollar is being influenced by multiple factors. The core is the decline in investor confidence in the outlook for US economic policy. Although US bond yields have risen for a time, its safe-haven status is being challenged, and the attractiveness of the US dollar as a global reserve currency is declining.

In the medium to long term, if the tariff policy cannot be implemented stably and the Fed's potential policy shift is superimposed, the dollar may continue to face selling pressure. Watch the remarks of Fed officials and the performance of actual inflation data and employment indicators in the coming weeks to determine whether the dollar will continue its current decline.